How To Never Have A Car Loan
January 22, 2007 by Karen Weideman
Filed under automotive, financial matters, frugal living, money saving idea, saving money
Last week I discovered some articles from Steve Diggs. He is an author and has a financial ministry called “No Debt! No Sweat!” Steve has some tips to help us keep from having car payments.
Step 1) Forget your ego. I know this one is hard. Americans tend to identify themselves with their cell phones, cars, and gadgets. It is sometimes hard to settle for a 2000 Chevy Venture when your friend is driving a new Chrysler Town & Country. I know. I’m there. BUT, I look at their car and know that my mini-van didn’t cost nearly as much as theirs and that they are taking a major depreciation to have that new vehicle.
Step 2) Save $3,000-$4,000 and buy a safe, affordable car. Get focused on saving that money. Do whatever it takes. Cut out going out to eat, buying new clothes, a vacation, work overtime, etc.
Step 3) Now, start making monthly car payments to yourself. Now that you have a “new” car in the driveway, start making car payments to yourself. Put that money away that you would be spending on the car you so desperately wanted to buy. The hard part is not cheating. It’s easy to say, ‘Well, I really want a new tv or new cell phone this month. I’ll just keep the money that I was going to use for the car payment.’ Wrong! You were going to have to make the car payment anyway. In a few years, you’ll have saved about $9,000. It’s enough to get a nicer car that you can pay cash for or you can keep saving for a new one (although I wouldn’t recommend it because of the depreciation).
Step 4) Repeat the process. Just keep doing this until you’re driving the car you’ve been wanting.
For more information, read Steve’s complete article.
